All That Glitters Is Now Not Copper

Those who followed my recommendations to bet heavily in copper plays over the last many years have been handsomely rewarded. Since the move began, Freeport McMoRan (FCX), the top copper producer in the world, has more than doubled.

The logic was very simple. Even a stagnant EV market still needs 200 pounds of the red metal per vehicle.  The needed tripling of the electrical grid demanded by AI assured that supplies would be challenged for years to come. Even conventional internal combustion engine cars require 50 pounds of copper.

The closure is 2024 of one of the world’s largest copper suppliers in Panama after a court ruling further exacerbated supplies. The recent imposition of a 50% tariff on copper imports has only made domestic US copper more expensive.

When Chinese speculators targeted copper, it was really off to the races.

The red metal has been on a tear in 2025, picking up some 40% since August. Similarly, Freeport McMoRan (FCX), the top copper producer in the world, has risen by 58%, and (COPX) has jumped by an incredible 95%.

But there may be larger factors at play.

For a start, the much-hoped-for Chinese economic recovery never took place. Chinese construction demand for copper is still at rock bottom, with home prices off 70% and bankruptcies rippling through the system.

And through my own research, I discovered that AT&T has begun scrapping its copper landline system in favor of far cheaper and more efficient fiber optic cable and cellular networks. If (T) were smart enough to take advantage of this, it could unleash as much as a year’s supply of scrap copper on the market.

An effort by BHP to take over Anglo American, another big copper producer, fell apart.

If the Panama mine were to reopen early, that would tip the market from a shortage into a surplus.

Trend following Commodity Trading Advisors have flipped from bullish to bearish, putting further pressure on the market.

As a result, the copper market has temporarily come into balance. This could last some months.

Eventually, the shortage will come to the fore once again as the long-term fundamentals are so overwhelming.

Although the market was in a surplus for the first four months of the year, analysts say that will soon change. Copper demand is expected to exceed supply this year, and a deficit of around 600,000 metric tons over the next three years is possible. Other forecasts see a shortfall approaching half a million metric tons in 2025 alone.

The bottom line here is that Mr. Copper is not dead, just resting. I’ll let you know when the wake-up call sounds.